L&F Co. from South Korea disclosed on Monday that the 3.83 trillion won ($2.67 billion) supply agreement initially announced in February 2023 with Tesla has been slashed to a mere 9.73 million won. L&F noted in a filing that the 99% reduction was due to a change in the quantity supplied.
The insider, who preferred to remain anonymous when discussing confidential business issues, mentioned that the high-nickel cathode material that L&F was contracted to provide from January 2024 through this month was meant for Cybertruck batteries.
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According to the individual, delays in the car’s production and consumer preference for other models, such as Tesla’s Model 3 sedan and Model Y SUV, resulted in limited available material.
The source indicated that broader policy and economic factors, including the removal of Inflation Reduction Act subsidies, also influenced the supply agreement. Tesla’s representatives did not respond to an email seeking comment.
L&F stated that the change was unavoidable due to revised timelines that reflect shifts in the global electric vehicle market and battery supply conditions.
“There have been no changes to shipments or customer supply of the company’s flagship high-nickel product,” L&F asserted, adding that shipments to major Korean cell manufacturers are proceeding seamlessly.
L&F’s stock dropped 11% in Seoul on Tuesday. The company also supplies battery manufacturers such as LG Energy Solution Ltd. This year, its stock has risen roughly 16%, lagging behind the benchmark Kospi Index’s 76% surge.
